<PAGE>
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the use of the commission only (as permitted by Rule
14a-6(e)(2))
TRANSWORLD HEALTHCARE, INC.
(Name of Registrant as Specified In Its Charter)
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- -----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
- -----------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
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(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE>
PRELIMINARY COPIES
TRANSWORLD HEALTHCARE, INC.
555 MADISON AVENUE
NEW YORK, NEW YORK 10022
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
------------------------
, 1998
------------------------
To the Shareholders of
TRANSWORLD HEALTHCARE, INC.:
NOTICE IS HEREBY GIVEN that a special meeting (the "Special Meeting") of
shareholders of Transworld HealthCare, Inc. (the "Company") will be held at
805 Third Avenue, New York, New York 10022, 20th Floor, on , 1998, at
11:00 a.m., local time, for the following purposes, all as more fully
described in the attached Proxy Statement:
I. To consider and vote upon a proposal to approve and adopt a Stock
Purchase Agreement dated as of March 26, 1997, as amended (the "Purchase
Agreement"), by and between the Company and Hyperion Partners II L.P., a
Delaware limited partnership ("HPII"), pursuant to which the Company has
agreed, among other things, to issue to HPII such number of shares of the
Company's common stock, par value $.01 (the "Common Stock") determined by
dividing the Agreed Value by the Agreed Price (as such terms are defined in
the attached Proxy Statement), in consideration of the assignment and
transfer to the Company by HPII of (i) $12,396,948 of face amount of
accounts receivable originally owed by Health Management, Inc. ("HMI") to
FoxMeyer Corporation and its subsidiaries and incurred on or before November
13, 1996, and assigned to HPII by California Golden State Finance Company
pursuant to an Agreement of Transfer of Receivables dated November 19, 1996
(the "FoxMeyer Receivable"); (ii) $2,800,000 of face amount of accounts
receivable originally owed by HMI to Bindley Western Industries, Inc.
("Bindley") and assigned to HPII by Bindley pursuant to a Purchase and Sale
Agreement dated December 20, 1996 (the "Bindley Receivable"); and (iii) a
$3,000,000 Subordinated Note dated March 31, 1995 originally issued by HMI
Illinois, Inc. ("HMI Illinois") to Caremark Inc. ("Caremark"), together with
a related Subordinated Continuing Guaranty originally issued by HMI to
Caremark and $132,936 of face amount of accounts receivable originally owed
by HMI and/or HMI Illinois to Caremark, all of which was assigned to HPII by
Caremark pursuant to a Purchase and Sale Agreement dated December 23, 1996
(collectively, with the FoxMeyer Receivable and the Bindley Receivable, the
"HMI Receivables").
II. To consider and vote upon the approval of an amendment to Article
Fourth of the Company's Restated Certificate of Incorporation, as amended,
to increase the number of authorized shares of capital stock from 32,000,000
to 42,000,000.
III. To consider and vote upon the approval of an amendment to Article
First of the Company's Restated Certificate of Incorporation, as amended,
changing the name of the Company to "Transworld Healthcare, Inc."
IV. To consider and vote upon the approval of an amendment to Article
Second of the Company's Restated Certificate of Incorporation, as amended,
to correct a typographical error in such Article.
V. To transact such other business as may properly come before the
Special Meeting and any and all adjournments thereof.
Approval of Proposal I above is a condition to closing the Purchase
Agreement. The affirmative vote of the holders of a majority of the Common
Stock represented in person or by proxy at the Special
<PAGE>
Meeting is required to approve Proposal I and the affirmative vote of the
holders of a majority of the outstanding shares of the Common Stock is
required to approve Proposals II, III and IV.
The accompanying Proxy Statement and the Exhibits thereto, including the
Purchase Agreement, forms a part of this Notice.
The Board of Directors has fixed the close of business on , 1998 as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the Special Meeting or any adjournment thereof.
You are requested to complete, sign, date and return the accompanying form
of proxy in the enclosed envelope provided for that purpose (to which no
postage need be affixed if mailed in the United States) whether or not you
expect to attend the Special Meeting in person. The proxy is revocable by you
at any time prior to its exercise and will not affect your right to vote in
person in the event you attend the Special Meeting. The prompt return of the
proxy will be of assistance in preparing for the Special Meeting and your
cooperation in this respect will be greatly appreciated.
By Order of the Board of Directors
Gregory E. Marsella
Secretary
, 1998
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YOUR VOTE IS IMPORTANT. TO VOTE YOUR SHARES,
PLEASE COMPLETE, SIGN AND DATE THE ENCLOSED
PROXY AND MAIL IT PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE.
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2
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TABLE OF CONTENTS
PAGE
----
INTRODUCTION ........................................................ 1
General ............................................................ 2
VOTING RIGHTS AND VOTING SECURITIES ................................. 2
Voting at the Special Meeting ...................................... 2
Security Ownership of Certain Beneficial Owners and Management ..... 2
THE PURCHASE AGREEMENT .............................................. 3
General ............................................................ 3
Sale of the Shares ................................................. 4
Certain Required Consents .......................................... 4
Use of Proceeds .................................................... 5
Description of Registration Rights Agreement ....................... 5
Reasons for the Purchase Agreement ................................. 5
Effect of Proposal ................................................. 6
INTEREST OF OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS
IN THE TRANSACTION ................................................. 6
DESCRIPTION OF SECURITIES ........................................... 6
General ............................................................ 6
Preferred Stock .................................................... 6
Common Stock ....................................................... 7
The Company's Transfer Agent ....................................... 7
PROPOSAL I: APPROVAL AND ADOPTION OF PURCHASE AGREEMENT ............. 7
Required Affirmative Vote .......................................... 7
PROPOSAL II: INCREASE IN AUTHORIZED CAPITAL STOCK ................... 7
Background ......................................................... 8
Reasons for Proposal ............................................... 8
Effect of Proposal ................................................. 8
Required Affirmative Vote .......................................... 9
PROPOSAL III: CHANGE IN COMPANY NAME ................................ 9
Reasons for Proposal ............................................... 9
Required Affirmative Vote .......................................... 9
PROPOSAL IV: CORRECTION OF RESTATED CERTIFICATE OF INCORPORATION .... 9
Reasons for Proposal ............................................... 9
Required Affirmative Vote .......................................... 9
1997 SHAREHOLDER PROPOSALS .......................................... 10
OTHER MATTERS ....................................................... 10
SOLICITATION OF PROXIES ............................................. 10
PURCHASE AGREEMENT .... ........................................ EXHIBIT A
i
<PAGE>
PRELIMINARY COPIES
TRANSWORLD HEALTHCARE, INC.
555 MADISON AVENUE
NEW YORK, NEW YORK 10022
------------------------
PROXY STATEMENT FOR THE
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON , 1998
------------------------
INTRODUCTION
This Proxy Statement and the accompanying proxy are being furnished to
shareholders of Transworld HealthCare, Inc. (the "Company") in connection
with the solicitation of proxies by the Board of Directors for use in voting
at the Special Meeting of Shareholders to be held at 805 Third Avenue, New
York, New York, on , 1998, at 11:00 a.m., and at any and all
adjournments thereof (the "Special Meeting"). The Company intends to mail to
its shareholders definitive copies of this Proxy Statement and the
accompanying proxy on or about , 1998.
At the Special Meeting, shareholders of the Company as of the close of
business on , 1998 (the "Record Date") will consider and vote upon
the following proposals: (i) Proposal I to approve and adopt a Stock Purchase
Agreement dated as of March 26, 1997, as amended (the "Purchase Agreement"),
by and between the Company and Hyperion Partners II L.P., a Delaware limited
partnership ("HPII"), pursuant to which the Company has agreed, among other
things, to issue to HPII such number of shares of the Company's common stock,
par value $.01 (the "Common Stock") determined by dividing the Agreed Value
(as defined herein) by the Agreed Price (as defined herein), in consideration
of the assignment and transfer to the Company by HPII of (A) $12,396,948 of
face amount of accounts receivable originally owed by Health Management, Inc.
("HMI") to FoxMeyer Corporation and its subsidiaries and incurred on or
before November 13, 1996, and assigned to HPII by California Golden State
Finance Company pursuant to an Agreement of Transfer of Receivables dated
November 19, 1996 (the "FoxMeyer Receivable"); (B) $2,800,000 of face amount
of accounts receivable originally owed by HMI to Bindley Western Industries,
Inc. ("Bindley") and assigned to HPII by Bindley pursuant to a Purchase and
Sale Agreement dated December 20, 1996 (the "Bindley Receivable"); and (C) a
$3,000,000 Subordinated Note dated March 31, 1995 originally issued by HMI
Illinois, Inc. ("HMI Illinois") to Caremark, Inc. ("Caremark"), together with
a related Subordinated Continuing Guaranty originally issued by HMI to
Caremark and $132,936 of face amount of accounts receivable originally owed
by HMI and/or HMI Illinois to Caremark, all of which was assigned to HPII by
Caremark pursuant to a Purchase and Sale Agreement dated December 23, 1996
(the "Caremark Receivable" and, collectively with the FoxMeyer Receivable and
the Bindley Receivable, the "HMI Receivables"); (ii) Proposal II to approve
an amendment to the Company's Restated Certificate of Incorporation, as
amended, to increase the number of authorized shares of capital stock from
32,000,000 to 42,000,000; (iii) Proposal III to approve an amendment to the
Company's Restated Certificate of Incorporation, as amended, changing the
name of the Company from "Transworld HealthCare, Inc." to "Transworld
Healthcare, Inc."; and (iv) Proposal IV to approve an amendment to the
Company's Restated Certificate of Incorporation, as amended to correct a
typographical error contained in Article Second.
Approval of Proposal I is a condition to closing the Purchase Agreement.
APPROVAL OF PROPOSAL I REQUIRES THE AFFIRMATIVE VOTE OF HOLDERS OF A
MAJORITY OF THE COMMON STOCK REPRESENTED IN PERSON OR BY PROXY AT THE SPECIAL
MEETING.
APPROVAL OF PROPOSALS II, III AND IV REQUIRE THE AFFIRMATIVE VOTE OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF THE COMMON STOCK.
<PAGE>
GENERAL
The enclosed proxy provides that each shareholder may specify that his or
her shares be voted "for," "against" or "abstain" from voting with respect to
each of the proposals. If the enclosed proxy is properly executed, duly
returned to the Company in time for the Special Meeting and not revoked, your
shares will be voted in accordance with the instructions contained thereon.
Where a signed proxy is returned, but no specific instructions are indicated,
your shares will be voted FOR each of the proposals.
Proxies marked as abstaining will be treated as present for purposes of
determining a quorum for the Special Meeting, but will not be counted as
voting in respect of any matter as to which abstinence is indicated. Proxies
returned by brokers as "non-votes" on behalf of shares held in street name
because beneficial owners' discretion has been withheld as to one or more
matters on the agenda for the Special Meeting will not be treated as present
for purposes of determining a quorum for the Special Meeting unless they are
voted by the broker on at least one matter on the agenda. Such shares will
not be counted as to the matters for which a non-vote is indicated on the
broker's proxy.
Any shareholder who executes and returns a proxy may revoke it in writing
at any time before it is voted at the Special Meeting by: (i) filing with the
Secretary of the Company, at the above address, written notice of such
revocation bearing a later date than the proxy or a subsequent proxy relating
to the same shares; or (ii) attending the Special Meeting and voting in
person (although attendance at the Special Meeting will not in and of itself
constitute revocation of a proxy).
Whether or not you attend the Special Meeting, your vote is important.
Accordingly, you are asked to sign and return the accompanying proxy
regardless of the number of shares you own. Shares can be voted at the
Special Meeting only if the holder is represented by proxy or is present.
VOTING RIGHTS AND VOTING SECURITIES
VOTING AT THE SPECIAL MEETING
The Board of Directors has fixed the close of business on , 1998
as the Record Date for the determination of shareholders entitled to notice
of, and to vote at, the Special Meeting. Only shareholders of record at the
close of business on the Record Date will be entitled to vote at the Special
Meeting or any and all adjournments thereof. On the Record Date, the Company
had shares of Common Stock issued and outstanding. The Common Stock is
the only class of outstanding voting securities of the Company. Each
shareholder of Common Stock will be entitled to one vote per share, either in
person or by proxy, on each matter presented to the shareholders of the
Company at the Special Meeting. The holders of a majority of all of the
outstanding shares of Common Stock entitled to vote at the Special Meeting
constitute a quorum at the Special Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of
Common Stock beneficially owned, as of the Record Date, by (i) all persons
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock; (ii) each director of the Company; (iii) each of
the Company's "named executive officers" as defined under the rules and
regulations of the Securities Act of 1933, as amended (the "Securities Act")
except as otherwise indicated in this table; and (iv) all directors and
executive officers of the Company as a group (8 persons).
NUMBERS OF SHARES
BENEFICIALLY PERCENTAGE
NAME OWNED BENEFICIALLY OWNED
---- ----- ------------------
Timothy M. Aitken(1) .................... 233,333 1.4%
Robert W. Fine(2) ....................... 158,388 *
Wayne A. Palladino ...................... 89,190 *
Scott A. Shay(3) ........................ 12,415,333 64.4%
2
<PAGE>
NUMBERS OF SHARES
BENEFICIALLY PERCENTAGE
NAME OWNED BENEFICIALLY OWNED
---- ----- ------------------
Lewis Ranieri(3) ........................ 12,415,333 64.4%
Hyperion Partners II L.P.(4) ............ 12,415,333 64.4%
Hyperion TW Fund L.P(5). ................ 12,415,333 64.4%
All executive officers and directors
as a group (8 persons)(4)(6)............ 13,000,517 66.0%
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* Less than one percent.
The above table does not include any shares of Common Stock which may be
beneficially owned by Gene Berger and Michael Garippa, who resigned as the
Executive Vice President and Vice President of the Company, respectively,
effective October 31, and June 27, 1997, respectively.
(1) Includes 233,333 shares subject to options exercisable within 60 days from
the Record Date.
(2) Includes 115,000 shares subject to options exercisable within 60 days from
the Record Date. Mr. Fine has indicated his intention to resign as a
Director, President and Chief Operating Officer of the Company upon
finalization of severence arrangements with the Company.
(3) Includes 5,298,877 shares of Common Stock and the 3,000,000 shares of
Common Stock underlying the common stock warrants (the "Warrants") which
HPII has purchased and 4,116,456 shares of Common Stock which Hyperion TW
Fund L.P. (the "Fund") has purchased (HPII and the Fund are affiliates of
Messrs. Ranieri and Shay) and as to which Messrs. Ranieri and Shay
disclaim beneficial ownership except to the extent of their respective
pecuniary interest therein. Excludes any shares of Common Stock to be
issued pursuant to the Purchase Agreement. The business address of Messrs.
Ranieri and Shay is 50 Charles Lindbergh Parkway, Uniondale, New York
11553.
(4) Includes 4,116,456 shares of Common Stock which the Fund (an affiliate of
HPII) has purchased and as to which HPII disclaims beneficial ownership
and 3,000,000 shares subject to the Warrants exercisable within 60 days
from the Record Date. The address of HPII is 50 Charles Lindbergh Parkway,
Uniondale, New York 11553. Excludes any shares of Common Stock to be
issued pursuant to the Purchase Agreement.
(5) Includes 5,298,877 shares of Common Stock and 3,000,000 shares subject to
the Warrants which HPII (an affiliate of the Fund) has purchased and as to
which the Fund disclaims beneficial ownership. The address of the Fund is
50 Charles Lindbergh Parkway, Uniondale, New York 11553. Excludes any
shares of Common Stock to be issued pursuant to the Purchase Agreement.
(6) Includes all shares held by Messrs. Aitken, Fine, Palladino, Ranieri,
Shay and three other executive officers, and those shares subject
to options held by such individuals exercisable within 60 days from the
Record Date.
THE PURCHASE AGREEMENT
The following is a brief summary of certain provisions of the Purchase
Agreement, as amended, and the Registration Rights Agreement (as defined
herein) to which the Shares are subject. A copy of the Purchase Agreement, as
amended, is annexed to this Proxy Statement as Exhibit A and is incorporated
herein by reference. A form of the Registration Rights Agreement was filed
with the Securities and Exchange Commission as an exhibit to the Company's
1995 Annual Report on Form 10-K. The following summary is qualified in its
entirety by reference to the Purchase Agreement and the Registration Rights
Agreement.
GENERAL
On March 26, 1997, the Company entered into the Purchase Agreement, with
HPII, pursuant to which HPII and the Company agreed, that subject to the
conditions stated in the Purchase Agreement (including receipt of shareholder
approval of Proposal I at the Special Meeting), the Company would issue
1,234,176 shares of Common Stock to HPII in exchange for the FoxMeyer
Receivable and the Bindley Receivables.
3
<PAGE>
In connection with a refocusing of the Company's business objectives
(which included the sale of the assets of HMI to Stadtlander Drug Co. Inc.
("Stadtlander")), effective as of August 14, 1997, the Company and HPII
amended the Purchase Agreement to provide that at the closing of the Purchase
Agreement (i) in addition to the FoxMeyer Receivable and the Bindley
Receivable, HPII would transfer to the Company the Caremark Receivable and
(ii) in lieu of a fixed number of shares of Common Stock (i.e., 1,234,176
shares), the Company would deliver to HPII a number of shares of Common Stock
(the "Shares") determined by dividing the Agreed Value (as defined herein) by
the Agreed Price (as defined herein).
For purposes of the Purchase Agreement, (A) "Agreed Value" means the sum
of the following amounts: (i) $4 million, plus (ii) 10% of the first $20
million of Net Recovery, plus (iii) 30% of the next $10 million of Net
Recovery, plus (iv) 50% of any amount of Net Recovery in excess of $30
million; (B) "Net Recovery" means the amount realized or recovered by the
Company on or after September 1, 1997 on or in respect of (i) any
indebtedness owed by HMI and/or its subsidiaries to the Company; (ii) any
investment made by the Company in HMI and/or its subsidiaries; and (iii) the
HMI Receivables (including, without limitation, by reason of any claims
against third parties relating to the purchase of any of the foregoing), net
of (x) the merger consideration paid by the Company to acquire HMI and (y)
all reasonable out-of-pocket costs and expenses incurred by the Company in
connection with such realization or recovery; Net Recovery does not include
any tax benefit to the Company from the net loss on its equity and debt
investments in HMI; and (C) "Agreed Price" means the lesser of $7 5/8 and the
closing price of the Common Stock of the Company on the last trading day
prior to the closing of the Purchase Agreement.
The Purchase Agreement also provides that if at any time or from time to
time subsequent to the closing the Company realizes a further Net Recovery,
then the number of Shares will be recalculated and the Company will promptly
deliver to HPII one or more additional certificates representing the number
of additional shares of Common Stock resulting from such recalculation.
On October 1, 1997 the Company's wholly-owned subsidiary, IMH Acquisition
Corp., completed its previously announced merger with HMI and HMI became a
wholly owned subsidiary of the Company. Concurrently with the closing of the
merger, the Company also completed the previously reported sale of
substantially all the assets of HMI to Stadtlander, a subsidiary of Counsel
Corporation.
APPROVAL OF THE TRANSACTIONS WHICH ARE THE SUBJECT OF THE PURCHASE
AGREEMENT (THE "TRANSACTION") IS THE SUBJECT OF PROPOSAL I TO BE VOTED ON AT
THE SPECIAL MEETING.
SALE OF THE SHARES
Subject to the terms of the Purchase Agreement, and promptly following the
completion of the Special Meeting if Proposal I is approved, HPII will
purchase the Shares from the Company at the closing (the "Closing") in
consideration of the assignment of the HMI Receivables. In addition to
approval of Proposal I at the Special Meeting, the consummation of the
Closing is subject to a number of stated conditions.
Included among the stated conditions for the Closing are that the
representations and warranties of the Company contained in the Purchase
Agreement are true in all material respects, that the Company has complied
with and performed in all material respects its agreements to be performed at
or prior to the Closing, that all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, have
expired (which has occurred) and that various closing documents shall have
been executed and delivered by the Company.
CERTAIN REQUIRED CONSENTS
The Company's Common Stock and Public Warrants (as defined herein) are
traded on the Nasdaq National Market (the "NASDAQ/NM"). Among the NASDAQ/NM
rules applicable to the Company, the Company is required to obtain
shareholder approval prior to the issuance of Common Stock in connection with
the acquisition of the assets of another company if any director, officer or
substantial
4
<PAGE>
shareholder of the Company has a 5% or greater interest, in the company or
assets to be acquired or in the consideration to be paid in the transaction
and the present or potential issuance of common stock, could result in an
increase in outstanding common shares or voting power of 5% or more. Since
HPII is a "substantial shareholder" of the Company under applicable NASDAQ/NM
rules and it owns 100% of the HMI Receivables, the NASDAQ/NM rules require
that the Transaction receive the prior approval of the shareholders of the
Company, which approval is being sought at the Special Meeting as Proposal I.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
Shares, but will receive the HMI Receivables. The aggregate face amount of
the HMI Receivables is $18,329,884. The purchase price paid by HPII for the
HMI Receivables was $11,276,105. As of the Record Date assuming the Agreed
Value is $7,500,000 (based upon estimates by the Company thereof) and the
Agreed Price is $7 5/8, the Company will issue to HPII 983,607 shares of
Common Stock. Accordingly, under such circumstances, the Company would be
acquiring the HMI Receivables at a discount of approximately $10,829,884 from
their original face amount and a discount of $3,776,105 from HPII's purchase
price, and HPII would realize a loss of approximately $3,776,105 in
connection with the Transaction. Insofar as the exact number of Shares to be
issued to HPII is predicated upon events which will in all likelihood not
have occurred by the date of the Special Meeting, the Company is unable to
state with certainty the exact number of Shares which may be issued to HPII.
Messrs. Ranieri and Shay are members of the Company's Board of Directors.
Mr. Ranieri also is chairman and president, and Mr. Shay is the executive
vice president and both are shareholders and directors of Hyperion Funding II
Corp., the general partner of Hyperion Ventures II L.P. ("HVII"), the general
partner of HPII. Messrs. Ranieri and Shay have various other economic
interests in HPII. See "Interest of Officers, Directors and Principal
Shareholders in the Transaction."
DESCRIPTION OF REGISTRATION RIGHTS AGREEMENT
In connection with the Purchase Agreement, the Company and HPII have
acknowledged that the Shares constitute "Registrable Securities" under the
registration rights agreement between the Company and HPII dated May 29, 1996
(the "Registration Rights Agreement"). Set forth below is a summary of the
Registration Rights Agreement, which is qualified in its entirety by
reference to such agreement. A form of the Registration Rights Agreement was
filed with the Securities and Exchange Commission as an exhibit to the
Company's 1995 Annual Report on Form 10-K.
The Registration Rights Agreement provides that, holders of at least 50%
of the Registrable Securities (which must include HPII or one of its partners
in any event) have the right to demand that the Company register the
requesting parties' Registrable Securities together with all Registrable
Securities of any other holder of Registrable Securities which indicates,
after receipt of notice from the Company, that such holder wishes to have its
Registrable Securities registered at such time. The Company is obligated to
use its best efforts to effect such registration as soon as practicable, but
in any event within sixty (60) days, after receipt of the initial request.
The Company has the right, which can be utilized once in any given twelve
(12) month period, to defer a demand registration for a period of ninety (90)
days after receipt of a request therefor if the Board of Directors determines
that it would be seriously detrimental to the Company and its shareholders
for such registration statement to be filed by reason of a material pending
transaction. All expenses of effecting a demand registration, other than
underwriting discounts and commissions, will be borne by the Company.
The Registration Rights Agreement also grants to the holders of
Registrable Securities certain "piggyback" rights to have Registrable
Securities included in a registration statement to be filed by the Company
for either its own benefit or for the registration of securities for the
account of other shareholders of the Company. The Company will bear all
expenses, other than underwriting discounts and commissions, in connection
with any such "piggyback" registration.
The Company is also obligated in connection with any registration under
the Registration Rights Agreement to utilize its best efforts to qualify the
sale of such Registrable Securities under the "blue sky"
5
<PAGE>
laws of such states or jurisdictions as are reasonably requested by the
holders of such Registrable Securities and, in general, to use its best
efforts to complete the registration of such securities.
REASONS FOR THE PURCHASE AGREEMENT
In connection with the Company's original plan to acquire, operate and
enhance HMI's businesses, the Company believed it would be advantageous to
acquire certain trade payables of HMI that HPII had accumulated with the
Company's approval in exchange for Common Stock of the Company. Accordingly,
the Company and HPII originally entered into the Purchase Agreement in March
1997, which then provided for the transfer to the Company of only the
FoxMeyer Receivable and the Bindley Receivable, having an aggregate face
amount of $15,196,948, for 1,234,176 shares of Common Stock. Subsequently,
and as part of the refocusing of the Company's business objectives (which
included the sale of substantially all of HMI's assets), the Company
concluded, and HPII agreed, that it would be appropriate to amend the
Purchase Agreement to include the Caremark Receivable, and to tie the amount
paid by the Company for the HMI Receivables to the amounts actually realized
by the Company from the disposition of the HMI assets. Accordingly, the
Purchase Agreement was amended.
EFFECT OF PROPOSAL
The issuance of the Shares may have a dilutive effect on earnings per
share and on the equity of the present holders of Common Stock. After giving
effect to the Transaction, assuming the issuance of Shares under the
circumstances described under "Use of Proceeds", the aggregate number of
shares of Common Stock represented by the Shares would be 983,607 or
approximately % of the issued and outstanding shares of Common Stock on a
fully diluted basis as of the Record Date as computed in accordance with
generally accepted accounting principles.
INTEREST OF OFFICERS, DIRECTORS AND
PRINCIPAL SHAREHOLDERS IN THE TRANSACTION
The HMI Receivables were purchased by HPII in three separate transactions
during the period from November 13, 1996 through December 23, 1996 for an
aggregate purchase price of $11,276,105. Accordingly, and assuming the Shares
issued to HPII are valued at $7,500,000, HPII, a principal shareholder of the
Company, will realize a loss of $3,776,105 on the transfer of the HMI
Receivables to the Company, representing the difference between HPII's
purchase price of $11,276,105 and the assumed sale price of $7,500,000. As
noted above, the actual amount of HPII's loss on the Transaction will depend
upon the final "Agreed Price" and "Agreed Value."
HPII owns as of the Record Date 5,298,877 shares (or approximately % of
the Company's outstanding shares of Common Stock) and warrants to purchase an
additional 3,000,000 shares and the Fund owns as of the Record Date 4,116,456
shares (or approximately % of the Company's outstanding shares of Common
Stock). As a result, HPII and the Fund have voting power sufficient to
approve Proposal I regardless of the vote of any other stockholders of the
Company entitled to vote on Proposal I at the Special Meeting.
Messrs. Ranieri and Shay are members of the Company's Board of Directors.
As of the Record Date, other than as indicated under "Voting Rights and
Voting Securities -- Security Ownership of Certain Beneficial Owners and
Management," no executive officers or directors of the Company beneficially
owned any outstanding shares of the Company's Common Stock.
DESCRIPTION OF SECURITIES
GENERAL
The Company's authorized capital stock currently consists of 30,000,000
shares of Common Stock and 2,000,000 shares of preferred stock, par value
$.01 per share (the "Preferred Stock"). As of the Record Date, there were
shares of Common Stock issued and outstanding (held by approximately
holders or record) and no shares of Preferred Stock issued or outstanding.
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The Common Stock is quoted on the NASDAQ/NM under the symbol "TWHH."
PREFERRED STOCK
The Preferred Stock may be issued in series, and shares of each series
will have such rights and preferences as are fixed by the Board of Directors
in resolutions authorizing the issuance of that particular series. In
designating any series of Preferred Stock, the Board of Directors may,
without further action by the holders of Common Stock, fix the number of
shares constituting that series and fix the dividend rights, dividend rate,
conversion rights, voting rights (which may be greater or lesser than the
voting rights of the Common Stock), rights and terms of redemption (including
any sinking fund provisions), and the liquidation preferences of the series
of Preferred Stock. Holders of any series of Preferred Stock, when and if
issued, may have priority claims to dividends and to any distributions upon
liquidation of the Company, and other preferences over the holders of the
Common Stock.
The Board of Directors may issue a series of Preferred Stock without
action by the shareholders of the Company. The issuance of Preferred Stock
may adversely affect the rights of the holders of the Common Stock. For
example, the issuance of Preferred Stock may be used as an "anti-takeover"
device without further action on the part of the shareholders. In addition,
the issuance of Preferred Stock may dilute the voting power of holders of
Common Stock (such as by issuing Preferred Stock with supervoting rights) and
may render more difficult the removal of current management, even if such
removal may be in the shareholders' best interests. The Company has no
current plans to issue any of the Preferred Stock.
COMMON STOCK
Each share of Common Stock entitles the holder thereof to one vote.
Holders of the Common Stock have equal ratable rights to dividends from funds
legally available therefor, when, as and if declared by the Board of
Directors and are entitled to share ratably, as a single class, in all of the
assets of the Company available for distribution to holders of shares of
Common Stock upon the liquidation, dissolution or winding up of the affairs
of the Company. Holders of Common Stock do not have preemptive, subscription
or conversion rights. There are no redemption or sinking fund provisions for
the benefit of the Common Stock in the Company's Restated Certificate of
Incorporation. All outstanding shares of Common Stock are validly issued,
fully paid and nonassessable.
THE COMPANY'S TRANSFER AGENT
The Company's transfer agent for the Common Stock is American Stock
Transfer & Trust Company, New York, New York.
PROPOSAL I: APPROVAL AND ADOPTION OF
PURCHASE AGREEMENT
The members of the Board of Directors who are not affiliated with HPII
(the "Non-HPII Directors") ratified the Purchase Agreement on April 1, 1997
and September 13, 1997. Neither Scott A. Shay nor Lewis S. Ranieri (being the
Directors affiliated with HPII) voted on the approval of the Purchase
Agreement. The purchase price set forth in the Purchase Agreement was
determined by negotiation between HPII and the Non-HPII Directors.
The Non-HPII Directors propose that the Purchase Agreement be approved and
adopted.
REQUIRED AFFIRMATIVE VOTE
Approval of Proposal I to adopt the Purchase Agreement requires the
affirmative vote of holders of a majority of the Common Stock represented in
person or by proxy at the Special Meeting.
THE NON-HPII DIRECTORS BELIEVE THAT PROPOSAL I IS IN THE BEST INTERESTS OF
THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR APPROVAL AND ADOPTION OF THE PURCHASE AGREEMENT.
PROPOSAL II: INCREASE IN AUTHORIZED CAPITAL STOCK
The Board of Directors proposes that the Company's Restated Certificate of
Incorporation be further amended to increase the Company's authorized capital
stock from 32,000,000 shares to 42,000,000 shares.
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BACKGROUND
The authorized capital stock of the Company currently consists of
30,000,000 shares of Common Stock and 2,000,000 shares of Preferred Stock. As
of the Record Date, there were shares of Common Stock issued and
outstanding and no shares of Preferred Stock issued and outstanding. The
Company also has reserved for issuance (i) 3,000,000 shares of Common Stock
issuable upon the exercise of options which may be granted under the
Company's 1992 Stock Option Plan, (ii) 306,681 shares of Common Stock
issuable upon exercise of outstanding options and warrants, (iii) 3,000,000
shares of Common Stock issuable upon exercise of the warrants held by HPII,
and (iv) 100,000 shares of Common Stock issuable upon the exercise of options
which may be granted under the Company's 1997 Option Plan for Non-Employee
Directors. See "Description of Securities."
REASONS FOR PROPOSAL
The Company proposes to increase its authorized capital in order to have
additional shares of Common Stock available for issuance. The amendment, if
adopted, will increase the number of authorized shares of Common Stock from
30,000,000 to 40,000,000 shares and will have no effect on the number of
shares of Preferred Stock currently authorized. The Board of Directors
believes that it is in the best interests of the Company to increase the
number of authorized shares of Common Stock at this time. An increase in the
number of shares of authorized capital stock will allow the Company to issue
additional shares of Common Stock, as the need may arise, to take advantage
of market conditions and the availability of favorable acquisition
opportunities without the delay and expense associated with holding a special
meeting of the shareholders at the time additional shares are needed. If the
Company is left with a limited number of authorized and unissued shares of
Common Stock it could adversely affect the Company's ability to respond to
favorable business growth opportunities, such as acquisitions desired by the
Company. The timing of the actual issuance of additional shares will depend
on market conditions, the specific purpose for which the Common Stock is to
be issued and other similar factors.
On November 24, 1997, the Board of Directors unanimously approved the
amendment to Article Fourth of the Restated Certificate of Incorporation, as
amended, increasing the Company's authorized capital stock from 32,000,000
shares to 42,000,000 shares.
EFFECT OF PROPOSAL
If the amendment is approved, the Company thereafter would have
approximately shares of Common Stock authorized, unissued and unreserved.
The increased number of authorized shares of Common Stock will be available
for issuance from time to time, for such purposes and consideration, and on
such terms as the Board of Directors may approve and no further vote of the
shareholders of the Company will be required except as provided under the
Business Corporation Laws of the State of New York and the NASDAQ/NM. The
issuance of additional shares of Common Stock may have a dilutive effect on
earnings per share and on the equity of the present holders of Common Stock
and their voting rights. Holders of Common Stock do not have preemptive
rights to subscribe for additional shares which may be issued by the Company.
The issuance of additional shares by the Company may potentially have an
anti-takeover effect by making it more difficult to obtain shareholder
approval of various actions such as a merger or removal of management.
Accordingly, this proposal, if approved, could, if additional shares are
issued, strengthen the position of management and might render it more
difficult or discourage an attempt to obtain control of the Company by means
of a merger, tender offer or other business combination directed at the
Company which if shareholders were offered a premium over the market value of
their shares, might be viewed as beneficial to shareholders of the Company.
For example, the issuance of shares of Common Stock in a public or private
sale, merger or similar transaction would increase the number of the
Company's outstanding shares, thereby diluting the interest of a party
attempting to obtain control of the Company. The Company is not aware of any
attempt, whether formal or informal, to acquire a controlling interest in the
Company. Moreover, the Company has no present plans or intentions to utilize
the additional shares of Common Stock as an anti-takeover device.
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REQUIRED AFFIRMATIVE VOTE
Approval of the amendment to Article Fourth of the Company's Restated
Certificate of Incorporation, as amended, increasing the authorized capital
stock from 32,000,000 shares to 42,000,000 shares, requires the affirmative
vote of holders of a majority of the outstanding shares of Common Stock.
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST INTERESTS
OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR APPROVAL OF THE AMENDMENT TO ARTICLE FOURTH OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED.
PROPOSAL III: CHANGE IN COMPANY NAME
The Board of Directors proposes that the Company's Restated Certificate of
Incorporation be further amended to change the Company's name from
"Transworld HealthCare, Inc." to "Transworld Healthcare, Inc."
REASONS FOR PROPOSAL
The Board of Directors believe that it would be in the best interests of
the Company to avoid confusion by conforming the actual name of the Company
to the manner in which it is most frequently used by third parties in
business communications and correspondence.
On November 24, 1997, the Board of Directors unanimously approved an
amendment to the Restated Certificate of Incorporation, as amended, changing
the Company's name from "Transworld HealthCare, Inc." to "Transworld
Healthcare, Inc."
REQUIRED AFFIRMATIVE VOTE
Approval of the amendment to Article First of the Company's Restated
Certificate of Incorporation, as amended, changing the Company's name from
"Transworld HealthCare, Inc." to "Transworld Healthcare, Inc." requires the
affirmative vote of holders of a majority of the outstanding shares of Common
Stock.
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST INTERESTS
OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR APPROVAL OF THE AMENDMENT TO ARTICLE FIRST OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED.
PROPOSAL IV: CORRECTION OF RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors proposes that the Company's Restated Certificate of
Incorporation be further amended to correct a typographical error recently
discovered in Article Second thereof.
REASONS FOR PROPOSAL
The Board of Directors believes that it would be in the best interests of
the Company to correct the typographical error contained in Article Second at
the same time other corrective action is being taken concerning the Restated
Certificate of Incorporation.
On November 24, 1997, the Board of Directors unanimously approved an
amendment to the Restated Certificate of Incorporation, as amended, adding to
the end of Article Second the following text "without such consent or
approval first being obtained."
REQUIRED AFFIRMATIVE VOTE
Approval of the amendment to Article Second of the Company's Restated
Certificate of Incorporation, as amended, correcting the aforesaid
typographical error requires the affirmative vote of holders of a majority of
the outstanding shares of Common Stock.
9
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THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL IS IN THE BEST INTERESTS
OF THE COMPANY AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE SHAREHOLDERS VOTE
FOR APPROVAL OF THE AMENDMENT TO ARTICLE SECOND OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED.
1997 SHAREHOLDER PROPOSALS
In order for shareholder proposals for the 1997 Annual Meeting of
Shareholders to be eligible for inclusion in the Company's 1997 Proxy
Statement, they must have been received by the Company at its principal
executive offices, 555 Madison Avenue, New York, New York 10022 (Attn:
Secretary), prior to November 1, 1997. As of November 1, 1997, no such
proposals were received.
OTHER MATTERS
The Board of Directors does not know of any other matters that are to be
presented for consideration at the Special Meeting. Should any other matters
properly come before the Special Meeting, it is the intention of the persons
named in the accompanying proxy to vote such proxy on behalf of the
shareholders they represent in accordance with their best judgment.
SOLICITATION OF PROXIES
Proxies are being solicited by and on behalf of the Board of Directors.
The Company will bear the costs of preparing and mailing the proxy materials
to its shareholders in connection with the Special Meeting. The Company will
solicit proxies by mail and the directors and certain officers and employees
of the Company may solicit proxies personally or by telephone or telegraph.
These persons will receive no additional compensation for such services but
will be reimbursed for reasonable out-of-pocket expenses. The Company also
will request brokers, dealers, banks and their nominees to solicit proxies
from their clients, where appropriate, and will reimburse them for reasonable
out-of-pocket expenses related thereto.
Gregory E. Marsella
Secretary
, 1998
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EXHIBIT A
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of the 26th
day of March, 1997 by and between Transworld Home HealthCare, Inc., a New
York corporation (the "Company"), and Hyperion Partners II L.P., a Delaware
limited partnership (the "Investor").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Shares.
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of
this Agreement, at the Closing (as hereinafter defined), the Investor agrees
to purchase and the Company agrees to sell and issue to the Investor
1,234,176 shares (the "Shares") of common stock, par value $.01 per share,
of the Company (the "Common Stock"). As full payment for the Shares, the
Investor agrees to assign and transfer to the Company, without recourse and
without representation or warranty (except as expressly set forth herein),
the following:
(a) $12,396,948 of face amount of accounts receivable originally owed
by Health Management, Inc. ("HMI") to FoxMeyer Corporation and its
subsidiaries and incurred on or before November 13, 1996, and assigned to
the Investor by California Golden State Finance Company pursuant to an
Agreement of Transfer of Receivables dated November 19, 1996, a copy of
which has been provided to the Company, together with any rights of the
Investor under such Agreement that are assignable (the "FoxMeyer
Receivable"); and
(b) $2,800,000 of face amount of accounts receivable originally owed
by HMI to Bindley Western Industries, Inc. ("Bindley") and assigned to
the Investor by Bindley pursuant to a Purchase and Sale Agreement dated
December 20, 1996, a copy of which has been provided to the Company,
together with any rights of the Investor under such Agreement that are
assignable (the "Bindley Receivable" and, together with the FoxMeyer
Receivable, the "HMI Receivables").
1.2 Closing. The purchase and sale of the Shares shall take place at the
offices of Proskauer Rose Goetz & Mendelsohn LLP, 1585 Broadway, New York,
New York 10036, within 15 days following the satisfaction of the conditions
set forth in Sections 4 and 5, or at such other time and place as the
Company and the Investor mutually agree upon orally or in writing (which
time and place are designated as the "Closing"). At the Closing, in addition
to satisfying the other conditions set forth herein, the Company shall
deliver to the Investor one or more certificates representing the Shares,
against delivery to the Company by the Investor of a duly executed
instrument assigning the HMI Receivables to the Company.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to, and agrees with, the Investor that:
2.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of New York. The Company has all requisite power and
authority to own, lease, license and use its properties and assets and to
carry on its business as now conducted and as proposed to be conducted. The
Company has all requisite power and authority to enter into and perform this
Agreement and the transactions contemplated hereby.
2.2 Authorization. All corporate action on the part of the Company and
its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, the performance of all obligations
of the Company hereunder and the authorization, sale, issuance and delivery
of the Shares has been taken, except for the approval of the shareholders of
the Company which is required by Rule 4460(i) (1) (C) (i) of the National
Association of Securities Dealers, Inc. (the "NASD") for continued trading
of the Company's securities on the National Association of Securities
Dealers Automated Quotation/National Market System ("Shareholder Approval").
This Agreement constitutes the valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except (i) as
enforceability may be limited by applicable bankruptcy,
<PAGE>
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally and (ii) as
enforceability may be limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
2.3 Valid Issuance of Shares.
(a) The Shares, when issued, sold and delivered in accordance with the
terms hereof and for the consideration expressed herein, (i) will be duly
and validly issued and fully paid and nonassessable, (ii) will be free of
any pledges, liens, security interests, claims or other encumbrances of any
kind, (iii) will be issued in compliance with all applicable federal and
state securities laws, and (iv) will not be issued in violation of any
preemptive rights of shareholders. The Shares have been duly and validly
reserved for issuance.
(b) The outstanding shares of Common Stock are all duly and validly
authorized and issued, fully paid and nonassessable, and were issued in
compliance with all applicable federal and state securities laws.
2.4 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority on the part of the
Company or any of its subsidiaries is required in connection with the
consummation of the transactions contemplated by this Agreement except for
(i) filing with the Securities and Exchange Commission on Form 10-C; (ii)
Shareholder Approval; and (iii) such filings as have been made.
2.5 Compliance with Other Instruments. The execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby will not result in a violation of, or be in conflict
with, or constitute, with or without the passage of time or the giving of
notice or both, a default under, any provision of the Company's certificate
of incorporation, as amended, or bylaws, as amended, or any judgment, order,
writ or decree, or any contract, agreement or instrument, or require any
consent, waiver or approval thereunder, or give rise to a right to terminate
or accelerate the performance required thereby, or constitute an event which
results in the creation of any lien, charge or encumbrance upon any asset of
the Company.
2.6 Registration Rights Agreement. The Shares are "Registrable
Securities" as that term is used in the Registration Rights Agreement dated
as of May 29, 1996 between the Company and the Investor (the "Registration
Rights Agreement"), and are entitled to all of the benefits of the
Registration Rights Agreement, except that the Investor may not require the
Company to effect the registration of the Shares prior to the first
anniversary of the date of this Agreement.
2.7 SEC Documents. The Company has provided the Investor with copies of
its Annual Report on Form 10-K for the fiscal year ended October 31, 1996
and its Quarterly Report on Form 10-Q for the quarter ended January 31, 1997
(collectively, the "SEC Documents"), each as filed with the Securities and
Exchange Commission. On the date of their respective filings, such SEC
Documents complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and none of such SEC Documents
contained any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
2.8 Financial Statements. The Company has delivered to the Investor its
audited consolidated financial statements (consolidated balance sheet and
consolidated statements of operations, changes in stockholders' equity and
cash flows) at October 31, 1996 and for the year then ended and its
unaudited financial statements (consolidated balance sheet and consolidated
statement of operations and cash flows) at January 31, 1997 and for the
three-month period then ended (collectively the "Financial Statements"). The
Financial Statements are complete and correct in all material respects and
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated.
The Financial Statements accurately describe the financial condition and
operating results of the Company and its subsidiaries as of the dates, and
for the periods, indicated therein, subject, in the case of the unaudited
financial statements, to normal year-end audit adjustments which will not in
the aggregate be material.
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2.9 No Material Adverse Changes. Except as disclosed in the SEC Documents
(and, to the extent the following representation relates to HMI, except as
previously disclosed to the Investor), since January 31, 1997, there has
been no material adverse change in the assets, properties, business,
operations, condition (financial or otherwise) or prospects of the Company
and its subsidiaries and the Company has no knowledge of any event which is
likely to result in any such change. To the extent the foregoing
representation relates to HMI, it is being made to the best knowledge of the
Company.
2.10 Disclosure. The Company has fully provided the Investor or its
counsel with all the information which the Investor has requested for
deciding whether to purchase the Shares and all information which the
Company believes is reasonably necessary to enable the Investor to make such
decision. Neither this Agreement nor any other statements or certificates
made or delivered in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements herein or therein not misleading.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company that:
3.1 Authorization. The Investor has all requisite power and authority to
enter into this Agreement. This Agreement has been duly executed and
delivered and constitutes the Investor's valid and legally binding
obligation, enforceable in accordance with its terms, except (i) as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as enforceability may be
limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
3.2 Purchase Entirely for Own Account. The Shares to be purchased by the
Investor will be acquired for investment for its own account, and, except as
contemplated by the Registration Rights Agreement or otherwise in accordance
with applicable securities laws, not with a view to the resale or
distribution of any part thereof and without the present intention of
selling, granting any participation in, or otherwise distributing the same.
3.3 Investment Experience. The Investor can bear the economic risk of its
investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the
investment in the Shares.
3.4 Restricted Securities. The Investor understands that the Shares it is
purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration
under the Securities Act of 1933, as amended (the "Act"), only in certain
limited circumstances. In this connection, the Investor represents that it
is familiar with Rule 144 of the Securities and Exchange Commission, as
presently in effect, and understands the resale limitations imposed thereby
and by the Act.
3.5 Legends. The Investor understands that the certificates evidencing
the Shares will bear the following legend:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES
LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH
ACT OR SUCH LAWS AND THE RULES AND REGULATIONS THEREUNDER."
The Shares shall not be required to bear such legend if an opinion of
counsel reasonably satisfactory to the Company is delivered to the Company
to the effect that neither the legend nor the restrictions on transfer
contained in this Agreement are required to insure compliance with the Act.
3
<PAGE>
Whenever, pursuant to the preceding sentence, any certificate for any of the
Shares is no longer required to bear the foregoing legend, the Company may,
and if requested by the holder thereof, shall, issue to the holder, at the
Company's expense, a new certificate not bearing the foregoing legend.
3.6 Ownership of HMI Receivables. The Investor owns and has good title to
the HMI Receivables, free and clear of all liens, claims, security interests
and encumbrances.
4. Conditions to the Investor's Obligations at Closing. The obligations of
the Investor under this Agreement are subject to the fulfillment on or before
the Closing of each of the following conditions:
4.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 shall be true in all material respects on
and as of the Closing with the same effect as though such representations
and warranties had been made on and as of the Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements, covenants, obligations and conditions contained in this
Agreement in all material respects that are required to be performed or
complied with by it on or before the Closing.
4.3 Compliance Certificate. The President or Chief Executive Officer of
the Company shall deliver to the Investor at the Closing a certificate
certifying that the conditions specified in Sections 4.1, 4.2, 4.5, 4.8,
4.10 and 4.11 have been fulfilled.
4.4 Qualifications: Litigation. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body that are required
in connection with the lawful issuance and sale of the Shares pursuant to
this Agreement shall be duly obtained and effective as of the Closing. No
federal, state or local regulatory or other governmental authority shall
have taken any action or issued any statement, written or oral, to the
effect that the transactions contemplated to be taken at the Closing may not
be consummated as currently structured, which action or statement, in the
reasonable judgment of the Investor, makes proceeding with the transactions
contemplated by this Agreement inadvisable. There shall not have been
instituted or threatened any legal proceeding relating to, or seeking to
prohibit or otherwise challenge, this Agreement or the consummation of the
transactions contemplated by this Agreement, or seeking to obtain
substantial damages with respect thereto.
4.5 Consents and Coordination. All third party consents and waivers that
are required in connection with the Closing under this Agreement, and the
consummation of the transactions contemplated hereby, shall be duly obtained
and effective as of the Closing.
4.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all
documents incident thereto shall be satisfactory in form and substance to
the Investor, and the Investor shall have received all such counterpart
original and certified or other copies of such documents as it may
reasonably request.
4.7 Opinion of Company Counsel. Baer, Marks & Upham LLP, counsel for the
Company, shall have delivered an opinion which is addressed to the Investor,
dated as of the Closing and substantially in the form delivered pursuant to
the Unit Purchase Agreement dated as of November 20, 1995 between the
Company and the Investor (the "Unit Purchase Agreement").
4.8 Banks Waiver and Consent. The Company shall have received, in form
and substance satisfactory to the Investor, (i) the waiver of the lenders
(the "Banks") party to the Credit Agreement dated as of July 31, 1996, as
amended (the "Credit Agreement") among the Company, the Banks and Bankers
Trust Company, as Agent, of any right the Banks may have to the proceeds of
the transactions contemplated hereby to prepay outstanding indebtedness of
the Company under the Credit Agreement, (ii) the consent of the Banks to the
issuance and sale of the Shares and waiver of any events of default caused
in connection therewith, and (iii) such other consents and waivers of the
Banks as may be required in connection with the transactions hereunder.
4.9 Hart-Scott-Rodino. Any applicable waiting periods in respect of the
transactions contemplated by this Agreement under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have expired at or
prior to the Closing.
4
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4.10 Shareholder Meeting. A special or annual meeting of shareholders of
the Company (the "Shareholder Meeting") shall have been duly called and held
at which meeting the shareholders of the Company shall have had an
opportunity to vote on a proposal to approve this Agreement and the
transactions contemplated hereby and at the Shareholder Meeting, Shareholder
Approval shall have been obtained.
4.11 Paribas Consent. The Company shall have received, in form and
substance satisfactory to the Investor, the consent of Paribas Principal,
Inc. to this Agreement and the Registration Rights Agreement.
5. Conditions to the Company's Obligations at the Closing. The obligations
of the Company to the Investor under Section 1 of this Agreement are subject
to the fulfillment on or before the Closing of the following conditions, any
of which may be waived by the Company:
5.1 Representations and Warranties. The representations and warranties of
the Investor contained in Section 3 shall be true in all material respects
on and as of the Closing with the same effect as though such representations
and warranties had been made on and as of the date of the Closing.
5.2 Payment of Purchase Price. The Investor shall have delivered to the
Company a duly executed instrument assigning the HMI Receivables to the
Company.
5.3 Performance. The Investor shall have performed and complied with all
agreements, covenants, obligations and conditions contained in this
Agreement in all material respects that are required to be performed or
complied with by it on or before the Closing.
5.4 Qualifications; Litigation. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body that are required
in connection with the lawful issuance and sale of the Shares pursuant to
this Agreement shall be duly obtained and effective as of the Closing. The
Shareholder Approval shall be duly obtained and effective as of the Closing.
There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge, this Agreement
or the consummation of the transactions contemplated by this Agreement, or
seeking to obtain substantial damages with respect thereto.
5.5 Banks Waiver and Consent. The Company shall have received, in form
and substance satisfactory to the Company, (i) the waiver of the Banks of
any right they may have to the proceeds of the transactions contemplated
hereby to prepay outstanding indebtedness of the Company under the Credit
Agreement, (ii) the consent of the Banks to the issuance and sale of the
Shares and waiver of any events of default caused in connection therewith,
and (iii) such other consents and waivers of the Banks as may be required in
connection with the transactions hereunder.
5.6 Hart-Scott-Rodino. Any applicable waiting periods in respect of the
transactions contemplated by this Agreement under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, shall have expired at or
prior to the Closing.
5.7 Consents and Coordination. All consents and waivers that are required
in connection with the Closing under this Agreement, and the consummation of
the transactions contemplated hereby, shall be duly obtained and effective
as of the Closing.
5.8 Paribas Consent. The Company shall have received, in form and
substance satisfactory to the Company, the consent of Paribas Principal,
Inc. to this Agreement and the Registration Rights Agreement.
6. Covenants of the Company. The Company covenants and agrees with the
Investor as follows:
6.1 Advice of Changes. The Company will promptly advise the Investor in
writing of (i) any event occurring subsequent to the date of this Agreement
which would render any representation or warranty of the Company contained
in this Agreement, if made on or as of the date of such event or the date of
the Closing, untrue or inaccurate in any material respect and (ii) any
material adverse change in the business of the Company and its subsidiaries
taken as a whole.
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6.2 Information. The Company will deliver to the Investor the information
specified in Section 6.9 of the Unit Purchase Agreement (as in effect on the
date hereof), unless the Investor at any time specifically requests that
such information not be delivered to it.
6.3 Observer and Director Rights. The Company will afford to the Investor
the observer, director and other rights specified in Sections 6.11 and
8.1(a) of the Unit Purchase Agreement (as in effect on the date hereof).
6.4 Listing Application. The Company shall prepare and file with the NASD
an Additional Listing Application, in the form and within the time period
prescribed by the NASD, with respect to the listing of the Shares.
6.5 Publicity. Except as may be required by law, the Company shall not
use the name of, or make reference to, the Investor or any of its affiliates
in any press release or in any public manner without the Investor's prior
written consent.
6.6 Certain Covenants Relating to Shareholder Approval Requirement. (a)
The Company will take all action necessary in accordance with applicable law
and its Certificate of Incorporation and By-laws to convene a meeting of its
shareholders as promptly as practicable to consider and vote upon the
approval of this Agreement and the transactions contemplated hereby. The
Board of Directors of the Company shall recommend such approval to the
shareholders of the Company and the Company shall take all lawful actions to
solicit such approval. The Company represents and warrants to, and agrees
with, the Investor that the Investor may vote at the Shareholder Meeting in
any manner as it, in its sole discretion, may choose, pursuant to Section
7.2(d) of the Unit Purchase Agreement.
(b) As soon as practicable, the Company shall file a proxy statement in
preliminary and definitive form with the Securities and Exchange Commission
in connection with the Shareholder Meeting. The Investor agrees to assist
and cooperate with the Company in the preparation of the proxy statement.
The definitive proxy statement ("Proxy Statement") for the Shareholder
Meeting shall be mailed to shareholders as soon as practicable. The Company
represents and warrants to the Investor that the Proxy Statement will comply
in all material respects with the requirements of the Exchange Act, and the
applicable rules and regulations thereunder, and that the Proxy Statement
will contain no untrue statement of any material fact and will not omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading.
7. Indemnification. The Company agrees to indemnify the Investor and its
general and limited partners, and each officer, director, employee, partner,
member, agent and affiliate of the Investor and its general and limited
partners (the "Indemnified Parties") for, and hold each Indemnified Party
harmless from and against: (i) any and all damages, losses, claims and other
liabilities of any and every kind, including, without limitation, judgments
and costs of settlement, and (ii) any and all out-of-pocket costs and
expenses of any and every kind, including, without limitation, reasonable
fees and disbursements of one counsel for such Indemnified Parties (selected
by the Investor) (all of which expenses periodically shall be reimbursed as
incurred), in each case, arising out of or suffered or incurred in connection
with (A) any investigative, administrative or judicial proceeding or claim
brought or threatened relating to or arising out of the Investor's purchase
of the Shares, or this Agreement, the Registration Rights Agreement, or the
transactions contemplated hereby and thereby, or (B) any material inaccuracy
or alleged inaccuracy in any representation or warranty of the Company made
or incorporated by reference in this Agreement or any material breach or
alleged breach by the Company of any covenant or agreement made or
incorporated by reference in this Agreement or the Registration Rights
Agreement.
8. Termination.
8.1 Termination Prior to Closing. This Agreement may be terminated at any
time prior to the Closing:
(a) by the mutual consent of the Investor and the Company;
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(b) by the giving of notice by the Investor or the Company at any time
after August 31, 1997 (or such later date as shall have been agreed to in
writing by the parties hereto), if at the time notice of such termination is
given the Closing shall not have been consummated; or
(c) by the Investor, if there has been a material misrepresentation or
material breach on the part of the Company in any of the representations,
warranties, covenants or agreements of the Company set forth herein, or if
there has been any material failure on the part of the Company to comply
with its obligations hereunder, or by the Company if there has been a
material misrepresentation or material breach on the part of the Investor in
any of the representations, warranties, covenants or agreements of the
Investor set forth herein, or if there has been any material failure on the
part of the Investor to comply with its obligations hereunder.
8.2 Liability Upon Termination.
(a) In the event of termination of this Agreement pursuant to Sections
8.1(a) or 8.1(b), no party hereto shall have any liability or further
obligation to any other party hereto except as provided in Sections 7, 9.7
and 9.8.
(b) In the event of termination pursuant to Section 8.1(c), (i) if the
Investor is the non-breaching party, the Investor shall be entitled to
reimbursement of expenses as set forth in Section 9.8 and (ii) the
non-breaching party shall have the right to pursue all rights and remedies
available to it hereunder or otherwise provided at law or equity, including
without limitation, the right to seek specific performance and money
damages.
9. Miscellaneous.
9.1 Survival of Warranties. The warranties, representations, covenants
and agreements of the Company and the Investor contained in or made pursuant
to this Agreement shall survive the execution and delivery of this Agreement
and the Closing. Neither any investigation by or on behalf of the Investor
nor the receipt by the Investor of any data or information from the Company,
shall in any way affect the right of the Investor to rely on the
representations, warranties, covenants and agreements of the Company or the
right of the Investor to terminate this Agreement as provided in Section 8.
9.2 Successors and Assigns. The Investor and each assignee of the
Investor may, without the consent of the Company, assign its rights under
this Agreement, in whole or in part, in connection with any sale or transfer
to an affiliate or a partner, and the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties. Nothing in this Agreement, express or implied,
is intended to confer upon any person other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of New York as applied to agreements among New
York residents entered into and to be performed entirely within New York.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.5 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed
effectively given upon receipt by the party to be notified or five days
after deposit with the United States Post Office, by registered or certified
mail,
7
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postage prepaid and addressed to the party to be notified (i) if to the
Company, at the following address:
75 Terminal Avenue
Clark, New Jersey 07066
Attn: Robert W. Fine
with a copy to:
Baer Marks & Upham LLP
805 Third Avenue
New York, New York 10022
Attn: Leslie J. Levinson
(ii) if to the Investor, at the following address:
50 Charles Lindbergh Blvd.
Suite 500
Uniondale, New York 11553-3600
Attn: Scott A. Shay
with a copy to:
Proskauer Rose Goetz & Mendelsohn LLP
1585 Broadway
New York, New York 10036
Attn: Bruce Lieb
or at such other address as any of the parties may designate by 10 days'
advance written notice to the other parties.
9.7 No Finder's Fee. Each party represents that it is not, and will not
be, obligated for any finder's fee or commission in connection with this
transaction.
The Investor agrees to indemnify and hold harmless the Company from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Investor or any of its officers, employees or
representatives is responsible.
The Company agrees to indemnify and hold harmless the Investor from any
liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of their respective officers,
employees or representatives is responsible.
9.8 Expenses. The Company agrees to pay all out-of-pocket fees and
reasonable expenses incurred by the Investor in connection with this
Agreement and the transactions contemplated hereby (whether or not the
transactions contemplated hereby are consummated) including, without
limitation, (i) the reasonable fees and expenses of counsel for the Investor
incurred in connection with this Agreement and the transactions contemplated
hereby (including the reasonable fees and expenses of Proskauer Rose Goetz &
Mendelsohn LLP, and including, without limitation, any legal fees and
expenses relating to any future waiver, consent or amendment, whether or not
any such future action is given or consummated) and (ii) all filing fees
relating to filings under the Hart-Scott-Rodino Antitrust Improvements Act
of 1974, as amended.
9.9 Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), only
with the written consent of the Investor and the Company.
9.10 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of this Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in accordance
with its terms.
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9.11 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof.
9.12 Equitable Adjustments. Prior to the consummation of the Closing, all
number of Shares referred to herein shall be equitably adjusted to account
for stock splits, stock dividends, mergers and similar corporate events.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
"COMPANY"
TRANSWORLD HOME HEALTHCARE, INC.
By: /s/
---------------------------
Name: Robert W. Fine
Title: President
"THE INVESTOR"
HYPERION PARTNERS II L.P.
By: HYPERION VENTURES II L.P.,
its General Partner
By: HYPERION FUNDING II CORP.,
its General Partner
By: /s/
---------------------------
Name:
Title:
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<PAGE>
TRANSWORLD HEALTHCARE, INC.
555 MADISON AVENUE
NEW YORK, NEW YORK 10022
As of August 14, 1997
Hyperion Partners II L.P.
50 Charles Lindbergh Boulevard
Suite 500
Uniondale, New York 11553-3600
Gentlemen:
Reference is made to the Stock Purchase Agreement (the "Agreement") dated
as of March 26, 1997, by and between Transworld HealthCare, Inc. (the
"Company") and Hyperion Partners II L.P. (the "Investor"). Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.
The parties have agreed that in view of the events that have taken place
since the Agreement was executed, it is appropriate and in the best interests
of the Company to amend the Agreement.
Accordingly, the parties hereto agree as follow:
1. The first sentence of Section 1.1 of the Agreement is hereby amended
and restated to read in its entirety as follows:
"Subject to the terms and conditions of this Agreement, at the Closing (as
hereinafter defined), the Investor agrees to purchase and the Company agrees
to sell and issue to the Investor the number of shares (the "Shares") of
common stock, par value $.01 per share, of the Company (the "Common Stock")
determined by dividing the "Agreed Value" by the "Agreed Price" (as such
terms are defined on Exhibit A hereto)."
2. The word "and" at the end of paragraph (a) of Section 1.1 is hereby
deleted.
3. The clause "(the "Bindley Receivable" and, together with the FoxMeyer
Receivable, the "HMI Receivables")." appearing at the end of paragraph (b) of
Section 1.1 is hereby deleted and replaced with the clause "(the "Bindley
Receivable"); and".
4. A new paragraph (c) is hereby added to Section 1.1 to read in its
entirety as follows:
"(c) $3,000,000 of face amount of subordinated note dated March 31, 1995,
originally owed by HMI Illinois, Inc. to Caremark, Inc. ("Caremark") and the
related Subordinated Continuing Guaranty of HMI dated as of March 31, 1995
with respect thereto, and $132,936 of face amount of accounts receivable
originally owed by HMI to Caremark, all of which were assigned to the
Investor by Caremark pursuant to a Purchase and Sale Agreement dated
December 23, 1996, a copy of which has been provided to the Company,
together with any rights of the Investor under such Agreement that are
assignable (the "Caremark Receivable" and, together with the FoxMeyer
Receivable and the Bindley Receivable, the "HMI Receivables")."
5. The following sentence is hereby added as the last sentence of Section
1.2:
"If at any time or from time to time subsequent to the Closing the Company
realizes a further "Net Recovery" (as defined on Exhibit A hereto), then the
number of Shares shall be recalculated and the Company shall promptly
deliver to the Investor one or more additional certificates representing the
number of additional shares of Common Stock resulting from such
recalculation."
6. The date "August 31, 1997" in clause (b) of Section 8.1 is hereby
deleted and replaced with "March 31, 1998."
7. A new Exhibit A is hereby added to the Agreement, in the form attached
hereto.
<PAGE>
* * *
Except to the extent amended hereby, the Agreement is and shall remain in
full force and effect and nothing herein shall affect, or be deemed to be a
waiver of, the other terms and provisions of the Agreement.
If this letter correctly sets forth our understanding with respect to the
foregoing matters, kindly execute and return the enclosed copy of this letter
to evidence our binding agreement.
Very truly yours,
TRANSWORLD HEALTHCARE, INC.
By: /s/
-------------------------------
Name:
Title:
AGREED TO:
HYPERION PARTNERS II L.P.
By: Hyperion Ventures II L.P.,
its General Partner
By: Hyperion Funding II Corp.,
its General Partner
By: /s/
-------------------------------
Name:
Title:
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<PAGE>
EXHIBIT A
CERTAIN DEFINITIONS
"Agreed Value" shall mean the sum of the following amounts: (i) $4
million, plus (ii) 10% of the first $20 million of Net Recovery, plus (iii)
30% of the next $10 million of Net Recovery, plus (iv) 50% of any amount of
Net Recovery in excess of $30 million.
"Net Recovery" shall mean the amount realized or recovered by the Company
on or after September 1, 1997 on or in respect of (i) any indebtedness owed
by HMI and/or its subsidiaries to the Company; (ii) any investment made by
the Company in HMI and/or its subsidiaries; and (iii) the HMI Receivables
(including, without limitation, by reason of any claims against third parties
relating to the purchase of any of the foregoing), net of (x) the merger
consideration paid by the Company to acquire HMI and (y) all reasonable
out-of-pocket costs and expenses incurred by the Company in connection with
such realization or recovery. Net Recovery shall not include any tax benefit
to the Company from the net loss on its equity and debt investments in HMI.
"Agreed Price" shall mean the lesser of $7 5/8 and the closing price of
the Common Stock of the Company on the last trading day prior to the Closing.
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PRELIMINARY COPIES
PROXY
TRANSWORLD HEALTHCARE, INC.
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Timothy M. Aitken (with full power to act
without the other and with power to appoint his substitute) as the
undersigned's proxy to vote all of the undersigned's shares of common stock
of TRANSWORLD HEALTHCARE, INC., a New York corporation (the "Company"), which
the undersigned would be entitled to vote at the Special Meeting of
Shareholders of the Company (the "Special Meeting") to be held at 805 Third
Avenue, New York, New York 10022, 20th Floor, on , 1998 at 11:00 a.m.,
local time, and at any and all adjournments thereof as follows:
I. Proposal to approve and adopt a Stock Purchase Agreement, dated as of
March 26, 1997, as amended, by and between the Company and Hyperion
Partners II L.P., a Delaware limited partnership, as described more
fully in the Proxy Statement accompanying this Proxy.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
II. Proposal to consider and vote upon the approval of an amendment to
Article Fourth of the Company's Restated Certificate of
Incorporation, as amended, to increase the number of authorized
shares of capital stock from 32,000,000 to 42,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
III. Proposal to consider and vote upon the approval of an amendment to
Article First of the Company's Restated Certificate of Incorporation,
as amended, changing the name of the Company to "Transworld
Healthcare, Inc."
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IV. Proposal to consider and vote upon the approval of an amendment to
Article Second of the Company's Restated Certificate of
Incorporation, as amended, to correct a typographical error in
Article Second thereof, as described more fully in the Proxy
Statement accompanying this Proxy.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
V. In their discretion, such other business as may properly come before
the Special Meeting and any and all adjournments thereof.
<PAGE>
THE SHARES OF COMMON STOCK REPRESENTED BY THIS PROXY WILL BE VOTED IN
ACCORDANCE WITH THE FOREGOING INSTRUCTIONS. IN THE ABSENCE OF ANY
INSTRUCTIONS, SUCH SHARES WILL BE VOTED FOR THE PROPOSAL IN ITEMS I, II, III
AND IV.
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders to be held on , 1998, and the Proxy Statement of
the Company, each dated , 1998, each of which has been enclosed herewith.
The undersigned hereby revokes any proxy to vote shares of common stock of
the Company heretofore given by the undersigned.
Dated
----------------------------------
---------------------------------------
Signature
---------------------------------------
Signature, if held jointly
---------------------------------------
Title (if applicable)
Please date, sign exactly as your name
appears on this Proxy and promptly
return in the enclosed envelope. In the
case of joint ownership, each joint
owner must sign. When signing as
guardian, executor, administrator,
attorney, trustee, custodian, or in any
other similar capacity, please give full
title. If a corporation, sign in full
corporate name by president or other
authorized officer, giving title, and
affix corporate seal. If a partnership,
sign in partnership name by authorized
person.